Italy Busts Mafia ‘Secret Bank’ That Laundered Money Through Crypto, Seizes $24M

Italian police have arrested 30 people accused of running an underground bank for organized crime from a car-rental business near Milan, and seized €21 million (about $23.6 million) in cash, bank balances, cryptocurrency, boats, jewelry and luxury watches, Italian news agency ANSA reported on Wednesday.

The operation, carried out by the Guardia di Finanza, Italy’s financial police, on the orders of Milan’s anti-mafia prosecutors, targeted suspects linked to the ‘Ndrangheta, the Camorra and organized crime groups from Foggia in southern Italy. Sixteen were taken into custody and 14 placed under house arrest, including two people arrested in Spain and one in Switzerland.

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According to investigators, the business in Pero, on the outskirts of Milan, was run by three Italians: two long-standing contacts of ‘Ndrangheta clans from Crotone, both previously convicted in earlier mafia investigations, and a member of the Camorra’s Casalesi clan. Chinese and Albanian accomplices helped operate the network, prosecutors said.

Shell companies issued more than €110 million in invoices for services never provided, letting businesses cut their tax bills. Those firms paid by bank transfer and received the money back in cash, minus a commission. The network moved about €68 million abroad, according to prosecutors.

Funds gathered in the shell companies’ accounts were sent to banks in Luxembourg, Lithuania and Germany, then routed through crypto exchanges into wallets controlled by the network, Bloomberg reported. Drug traffickers who handed over cash received crypto or international bank transfers in return, and the network also handled money stolen from victims of online crypto investment scams, according to the report.

The Guardia di Finanza’s technology fraud unit supported the investigation, which is set out in a court order running to more than 500 pages.

Among those arrested is a Guardia di Finanza inspector, placed under house arrest on corruption charges, according to Calabrian outlet LaC News24. Investigators also accused a Milan court employee of leaking information about ongoing investigations, and a lawyer and a former member of the financial police are among those caught up in the case.

The mafia and crypto

Italian authorities have warned for years that organized crime is adopting digital assets. In 2021, Italy’s Anti-Mafia Investigative Directorate said that “all criminal organizations, including those of the Mafia type, have an interest in using these instruments for their business,” and described the ‘Ndrangheta, Italy’s most powerful criminal syndicate, as “growing more and more attuned to modern tools like cryptocurrency and the deep web.”